I want to start with this view of the price and volume of the Dow over the last year. I have circled the major tops in the market previous to the current June 2009 price data. It seems to show that each time price made a peak or peaking the volume declined or remained flat while doing so. It possible that the same setup is occurring today. Will this mark some kind of topping action ... this remains to be seen. I just don't like this volume setup that is occurring. However, the money flow indicator is still showing a net inflow at this point. If we are to see any type of short term top ... we may be some time off from now baring any government intervention of the markets. For those who are counting the DJ US Total Market had a net inflow of $372 million for the day. The NYSE posted a 52% up volume day and the Financials sector had the largest outflow of cash in trading today.
I also wanted to show a different view of the volume issue that I was commenting on above. This is a chart of the S&P 500 (red line) price with the total NYSE volume (blue line) traded (7 day simple moving average was used to smooth the numbers for us). It just seems to me the more price moves up the less volume that is traded ... not much participation by the commercials in the rally. One item that could account for this is that the volatility index has moved down a good bit ... this could be the reason for the lower volume traded here and could possibly support further price increases in the short run.
But ... I still think it all comes down to this ... the US Dollar. Whatever the Dollar is going to do ... most likely the commodities and equities markets are going to do the opposite in the short run. Until the Dollar changes its downward direction ... the market is going to continue is move up as well as commodities.
I want to start with this view of the price and volume of the Dow over the last year. I have circled the major tops in the market previous to the current June 2009 price data. It seems to show that each time price made a peak or peaking the volume declined or remained flat while doing so. It possible that the same setup is occurring today. Will this mark some kind of topping action ... this remains to be seen. I just don't like this volume setup that is occurring. However, the money flow indicator is still showing a net inflow at this point. If we are to see any type of short term top ... we may be some time off from now baring any government intervention of the markets. For those who are counting the DJ US Total Market had a net inflow of $372 million for the day. The NYSE posted a 52% up volume day and the Financials sector had the largest outflow of cash in trading today.
I also wanted to show a different view of the volume issue that I was commenting on above. This is a chart of the S&P 500 (red line) price with the total NYSE volume (blue line) traded (7 day simple moving average was used to smooth the numbers for us). It just seems to me the more price moves up the less volume that is traded ... not much participation by the commercials in the rally. One item that could account for this is that the volatility index has moved down a good bit ... this could be the reason for the lower volume traded here and could possibly support further price increases in the short run.
But ... I still think it all comes down to this ... the US Dollar. Whatever the Dollar is going to do ... most likely the commodities and equities markets are going to do the opposite in the short run. Until the Dollar changes its downward direction ... the market is going to continue is move up as well as commodities. 
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